The Rich Get Richer. The Rest Of Us Pay For Their Economic Mess/May 2, 2012.

The Wall Street meltdown in 2008/2009 triggered the Great Recession, and led to a tax payer funded bailout of two trillion dollars.  Despite the losses, attributed in large part to a poorly regulated financial system, Wall Street continues to lobby against regulations in a world where self-interest trumps economic and social good.

It was during this same time that Prime Minister Harper assured us that our financial system was stable, and that we need not worry.

Well, he wasn’t telling the truth.

The Canadian Center For Policy Alternatives recently discovered that the bank bail-outs inCanadawere much larger than thought.  Canadian banks received $114 billion in bailouts during the recession, which is 10 times the amount that Canadian taxpayers spent on auto bailouts in 2009. 

Sixty-nine billion dollars worth of mortgages were taken off bank balance sheets, and are now covered by the CMHC program.  The banks won’t have to pay this back, but the tax payers will continue to be burdened with the risks.  

Banks also received $41 billion from the Bank of Canada, and they received $11 billion from the U.S Federal Reserve. 

Despite this, Canadian banks, like their American counterparts, want to “hit the pause button” on government regulation of their industry.  This,despite the risk to Canadian taxpayers, and the Canadian economy.

Bank Of Canada governor Mark Carney is right when he observes that the “too big to fail” mentality in the financial world isn’t fair, and that it necessarily exacerbates income inequalities in this country.

He notes, too, that other businesses went broke during the recession, but not the banks, because they are protected by the tax payers. Again, not fair.

Carney, who is also chair of the Financial Stability Board, adds that the Canadian Bankers Association is mistaken to suggest that government regulations on the industry “hit the pause button”. No doubt taxpayers would (or at least should)  agree.

Self-regulation in the financial industry is as ill advised as self-regulation in the petroleum industry.  In both cases, it is occurring, and in both cases, it is costing the tax payers dearly.

With health care on its knees, and “austerity measures” being imposed from above, Canadians would do well to remember that the 99% didn’t create the current economic mess, but that they are being asked to pay for it … again.

Mark Taliano is a Niagara resident and frequent contributor of news and commentary to Niagara At Large.